The United States government is back to work and President Obama’s health care law continues on. Both small and large businesses are working to implement new federal health care regulations but many are finding this to be a difficult task that requires some investigation and thoughtful planning. To help, HARDI has introduced the Medical Stop Loss Group Captive Solution and has officially named Lacey Robinson as its Health Benefits Consultant.

Robinson is the vice president of Gregory & Appel, an Indianapolis-based insurance agency and consultant. The company already has a relationship with HARDI as its endorsed property and casualty insurance provider and Robinson has been a featured speaker during HARDI’s Focus conferences this year. When the Insurance and Risk Committee recommended that HARDI endorse, promote, and support a health insurance solution intended to reduce costs and potentially generate returns for HARDI member companies, the board of directors approved.

According to Gregory and Appel, a captive is an insurance company established to provide insurance to its owners and participants. The company, which has 20 years of captive insurance experience, has approximately 50 clients participating in captives. A group captive, like the one HARDI is participating in, is an insurance facility formed by companies joining together to reduce the cost of insurance.

“Each have a desire to control their own risk,” according to the Medical Stop Loss Group Captive report produced by Gregory & Appel. “Member companies maintain good loss histories and effective risk management programs.”


New Year Considerations

Whether considering a move into a group captive or another insurance solution, distributors across the nation are preparing to comply with the new health care insurance laws. Before getting to Jan. 1, 2014, Robinson noted that there are some events and deadlines to consider.

Captive Case Study

Twelve employees banded together to reduce health care costs through a captive. They were state-funded nonprofit agencies that utilized Blue Cross/Blue Shied and other large regional networks and carriers. The companies were engaged in various plan designs and had limited experience with wellness. To top this off, there were mixed renewal dates for the group.

The results for this group’s participation with a captive led to an expected savings of $3.2 million off of expiring premium (deductible). Additional savings increased from underwriting profits projected to be greater than $475,000, and the single employer projected to save more than $600,000 compared to their fully insured option.

The group also projected to grow by 100 percent in the first year and engaged in a best-in-class wellness platform.

Source: Gregory & Appel Insurance, Roundstone

The first item to watch for has already opened and with considerable controversy. The insurance marketplaces for individuals and small employers are to be available with limited plan options. Insurance premium subsidies will be available for those who qualify.

“The individual mandate will begin on Jan. 1,” explained Robinson. “All Americans are required to have coverage. The penalty for not purchasing coverage will be $95 per adult or 1 percent of taxable income.”

She noted that the Employer Shared Responsibility, also known as pay or play, has been delayed until Jan. 1, 2015. It is expected that Medicaid will expand to 133 percent of the Federal Poverty Level in states who have chosen the expansion and health insurers will be assessed an annual fee.

“All plans must meet Essential Health Benefits, have a waiting period no longer than 90 days, remove any dollar limit caps, and remove limitations for pre-existing conditions,” said Robinson. “Non-grandfathered plans must also cover routine care associated with clinical trials for life-threatening diseases, meet maximum out-of-pocket maximums, and adhere to provider non-discrimination and protection of employees’ provisions.”


Post 2014

The Jan.1, 2014 health care deadlines have a lot to do with individuals, but businesses still have a fair amount to consider in order to be in compliance with the Federal laws. One of the key considerations according to Robinson is having the systems in place to effectively track employee service hours. Proof and documentation will be essential for the Federal government to verify compliance.

She also suggested a series of business evaluations to gauge compliance as well as find the best fit for a company and its employees.

“Ask yourself, ‘Should I be evaluating different staffing strategies,’ ” said Robinson. “You should also evaluate self funding, self funding with a captive, a private exchange, and defined contribution.”

She encouraged distributors to participate in a strategic plan and to conduct a pay or play analysis.

“The most important thing could be whether or not you have the right partners in place to help you accomplish all these things,” said Robinson.


HARDI Benefits

For HARDI members seeking advice, the association’s furthered relationship with Gregory and Appel provides for two free consulting hours on health benefits and insurance. It also provides access to specially reduced rates on consulting and consultations with senior leadership, benefit administrators, or brokers.

 For more information visit or contact Lacey Robinson at